PRECISION Air, Tanzania’s leading private carrier, is facing prospects of shutting down business operations in the first quarter of 2021 if the prevailing economic crisis doesn’t change, SAUTI KUBWA has learnt.
The airline is battling with the adverse effects of the COVID-19 pandemic, which has caused a decline in the number of passengers.
Apart from the COVID-19 pandemic, there are significant and undisputed claims that the Tanzania government is pampering its Air Tanzania (ATCL), while squeezing Precision Air on almost every business opportunity.
The Dar es Salaam-based airline, which has been in the skies for 27 years operating from major cities in East and Southern Africa, is facing a stiff economic hardship that may definitely lead to laying off more than 50 pilots. The company employs more than 150 Tanzanians in its various units.
“Things are very tough, we are struggling to pay for our daily and monthly operations, including salaries and other necessary overheads to keep our company going,” said one of the company’s top managers.
Senior company sources who preferred anonymity told SAUTI KUBWA that Precision Air, which was listed with the Dar es Salaam Stock Exchange (DSE) in 2011, had recorded a total comprehensive loss of Sh. 31,861,128,000 according to its recently audited reports.
Due to the uncertainty of airline passenger travel as a result of the continuing pandemic and other challenges, including unfair air and landing spaces, the only remaining option is to close down the business, he said.
It has come to light that, currently, Precision Air is operating two aircraft, as five others are grounded, not because of technical faults, but rather on financial grounds.
Due to these hardships, the airline will terminate or furlough most of its workforce other than limited staff needed in connection with the wind-down of operations and the review of future business opportunities.
On the 21st December 2011, Precision Air made history by being the first airline in Tanzania to list on DSE with a total of 7,056 investors who took part in the Initial Public Offering in November 2011.
The airline raised Sh. 12 billion most of which were taken up by Tanzanian nationals, both retail investors and corporate entities, as intended by the company.
In the internal memo of 27th June 2020, the airline’s management told each staff member to accept salary cut or choose to leave to table a resignation letter. Those opting to stay had to write a commitment letter accepting the salary cut.
The cut is said to stand down to a quarter of their salaries. Pilot salaries go higher up to Sh. 18 million a month. Most pilots and cabin crews have opted for the second option; salary cut.
The main reason for this, as seen in the memo, is what the airline called “managing a cash crunch” caused by the Covid-19 pandemic.
It is pity that the multi-award airline is about to close shop, which will mean no-cheap-tickets any more for the common Tanzanians who enjoyed boarding “the peoples flight” for more than 7 years.
Precision Air received The Best Domestic Scheduled Airline in Tanzania 2013 by the Tanzania Society of Travel Agents in 2013, Brand Excellence Award -Airline by Tanzania Leadership Awards in 2015, and in 2012, Bronze Award in the African Airline of the Year Awards awarded by African Aviation News portal.